The Hindu Business Line : ‘Buying into technology’

Is Retail buying into Technology? Absolutely, avers Jan De Jong, Global Industry Manager Retail, Microsoft Corporation. De jong, who was in Hyderabad recently, spent time with eWorld, talking of the trends shaping the role of technology in the retail arena.

He feels India, China and other emerging markets have become a resource base for new case studies. Their efforts to reach out and serve customers using the latest technologies, and not legacy systems, provides insights into how efficiencies can be brought into the system. Most of the technologies they are deploying are new.

De Jong believes consumer experience will never be the same with increased usage of technology. So much so that the day is not far off when consumers will make their payments directly over the mobile phone, he predicts.

With over 30 years’ experience, including engagements with Capgemini Consulting, Virgin Entertainment Group, which oversees Virgin Megastores, De Jong coordinates Microsoft’s initiatives in Retail and Hospitality. Over to Microsoft:

What are the problems faced by large retailers globally?

The technologies that retailers have deployed over the years, to serve their distributed networks, are without standards. Technology has been the key differentiator to bring about efficiencies, save on costs and offer better services to customers. The problem with old technology is that there are no standards and in many instances, one does not integrate with another. As a representative of the Board of Directors of the National Retail Federation, my focus is on bringing about common standards that will help integrate devices swiftly and easily. The challenge is we don’t even know what kind of technology will be deployed over the next five years, as innovations change business, the buying and payment patterns. There are too many elements within the retail industry — right from data warehouse, logistics, supply chain, store management, point of sale, etc. All of them need to be properly integrated.

How do you see organised retail in India growing?

Organised retail in India is in a rapid expansion mode but faces many hurdles — absence of proper supply-chain infrastructure and development of effective electronic payment and delivery channels.

The challenge is to do all of them simultaneously and make the process more efficient. However, one thing that stands out is that Indian retail chains are deploying the latest technologies. If you look at the US scene, it is estimated that about 67 per cent of investment in technology is on legacy systems. How does Microsoft’s Smart Retailing initiative fit in here?

This initiative focuses on use of technology in the retail store and how better to connect with the consumer. It has helped retailers across geographies to streamline their processes and will also be an important aspect in India. From general business, the focus has shifted to the individual customer. That includes demand forecasting about what they need. If you look at the emerging business models, such as the Homeshopping Network in the US, these actually seek the consumers’ views on their preferences and then places orders for those products. Everybody is connected in some way or the other, having access to e-mails, mobile phone and all of these are being used to help the consumer. Companies like Tesco have direct channels.

The instore technology seems to be undergoing a lot of changes…

The modern day store will provide enhanced consumer experience. Even as a customer walks into a store, his/her shopping list is synchronised with the store and the entire purchase path is charted out to help the customer. The time taken in a store too is cut short with payment and billing being handled through the mobile phone.

Even the point-of-sales terminals and sensor-based shop carts have become versatile. They help cut short the time a customer spends in a store.

The technology developed by Microsoft awaits deployment in retail stores, as customer privacy concerns are addressed.

I understand European chains such as Tesco, Metro, Ikea and Carrefour are, in many ways, ahead in use of technology compared to the US retailers?

It is interesting to note that European companies have grown serving small markets and have gradually tapped into other markets. This is quite different from, say, Wal-Mart’s growth, which was mainly through serving a large domestic market. Therefore, the likes of Tesco have evolved through a very efficient technology base. In fact, if you look at a Tesco store in the Central Business District of London, the shop is designed to save consumer time as most people in the region shop during the lunch break.

On the creation of loyalty programmes…

This calls for creating proper data bases through the use of appropriate business intelligence tools, which, in turn, help retailers understand what the consumer wants. Enterprise resource planning is at the heart of retailing. ERP helps manage the entire store and back-end.

By integrating various business elements into this, one can bring about significant efficiencies and thereby serve customers better. This is also where standards will make a difference and save on overall technology costs.

What drew Steve Ballmer to a Reliance Retail store in Hyderabad, eWorld asked Gaurav Sri Krishna, Director of Retail, Microsoft Corporation (India).

Says Sri Krishna, “Retail has become one of the thrust areas for Microsoft globally and in India. We are engaged directly, or through partners, with several major retail chains and are also in parleys with many others.”

“In fact, Microsoft is in the process of setting up a Retail Centre of Excellence in India that will bring together all its solutions and serve as a resource base for its customers,” he says. “We are talking to the top 10 retailers in the country. For smaller companies, we also have a software-plus-service offering,” says Sri Krishna.

vrishi@thehindu.co.in

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